1. If the Ms increases, in the short run, the interest rate falls. But overtime, the aggregate
price level rises, and this raises money demand, shifting the money demand curve
rightward. The economy moves to a new long-run equ
1. The term There Aint No Such Thing as a Free Lunch. comes from the concept that no
matter what you do or buy, whether its going to the gym or studying longer, buying fast
food or cooking, even taking a free meal instead of gi
1. Unemployment is the total number of people who are actively looking for a job but aren't
currently employed. The groups that are counted towards the labor force are the employed, and
those that are actively looking for work
1. A. There is a recessionary gap occurring in the economy.
B. Multiplier = 1/(1-.8) 1/.2 = 5
15,000 B 13,500 B = 1,500 B (gap)
1,500/5 = 300 b
To close the gap, the government the government needs to spend 300 Billion more, t
1. The business cycle is a series of cycles of expansion and contraction. There are four
phases of the business cycle. The economy starts with expansion, which is when the
economy is going through growth and things are going acco
The aggregate demand curve slopes downward in part because as the price level falls, the ability
of households and firms to borrow cheaply increases.
The aggregate supply curve shifts for three reasons: (1) Changes in expectat
1. A change in quantity demanded means the actual amount of something consumers are
willing to buy has either increased or decreased, usually caused by a change in price
which causes movements along a demand curve.(example- when the price o
1. Money is known for having three functions or services that it provides.Money serves as a
medium of exchange, as a unit of account, and as a store of value. Medium of exchange.
Money's most important function is as a medium
1. The rule of 70 is the number of years it takes for real GDP per capita to double is equal
to 70 divided by the annual growth rate of real GDP per capita.
b. It would take approximately 23 years for GDP to double. 70/3
1. CPI is the Consumer Price Index and measures the cost of the market basket of a typical
urban American family. It's constructed to represent the consumption of a typical family
of four living in a typical American city. Yes
1. A. decreases.
d. the demand increases while the supply decreases. Increases.
2. Physical capital is a factor of production, such as machinery or buildings. Human capital is
improvement in labor for
At March 31 Streuling Enterprises, a merchandising firm, had an inventory of 45,000 units, and
it had accounts receivable totaling $95,000. Sales, in units, have been budgeted as follows for the
next four months:
Streuling's board of directors has esta
1. Sanford manufacturing manufactures specialized scientific calculators. They sell for $85.
Selected data for last year operations are as follows:
Units in Beginning Inventory
Fixed OH in beginning inventory balance
Review Eco 112 Exam 3 Spring 2016
1) Refer the tax bracket below.
Determine the Marginal Tax Rate and the Average Tax Rate for the following people:
Average Tax Rate = Total Taxes due
a) Rory, Income: $155,000
b) Ronan, Income: $750,000
1. A change in quantity demand is when the price of the product changes and a change in
demand is when the buyer changes how much they are willing to buy at the current price
point. An example of change in quantity demand is if a price of a slice o
1. Question 1
a. Unemployment is the total number of eligible adults who are willing and able to
work and who are actively looking to find a job but have not found one
b. A job loser, a reentrant, a job leaver, a new entrant
c. People who are in school fu
1. Chapter 5 Question 1
a. A market failure is when the process of distributing goods and services are
b. The price system does not send the correct signal to consumers and producers
because the market failure prevents economic efficiency and
1. TANSTAAFL is demonstrating opportunity cost. The idea is that if you want something
you usually have to give something else up in order to get it. Nothing is really free
because somebody is giving something up for it, even if you are not the person tha
1. Hello all, my name is Andrew Pang and I will be entering my sophomore year in college. I am
enrolled in this class so that I can earn a dual degree in Computer Science Engineering and
Business/Finance at The Ohio State University in 5 years. My goal is
1. Unemployment Statistic
a. A measurement of the amount of unemployment currently in the economy. Is
found by dividing the number of unemployed people by all the people in the labor
b. The data started out at 7.9% then fell to 7.7% the next month
1. Syllabus link
2. Economics Today. 17th Edition PearsonAddison Wesley. (5th Suffolk Community
College edition) Roger LeRoy Miller
The university book store. It comes with MY ECON LAB with the text.
1. Markets are highly competitive because if they are highly competitive then no one can
hold a market off its full employment equilibrium. Wages and prices are completely
flexible because they will reflect supply and demand in the labor and goods market.
A. Part A
1. The problem in the economy is that inflation is increasing at a faster rate. This is
bad because it means that the value of the dollar is decreasing and goods that were
previously affordable could soon become unaffordable to the avera
1. Question 1
a. The problem in the economy is that there would be inflation because of a surplus
of $3,000 Billion.
b. 1/(1-0.8) = 5, 5*3,000B = 15,000B
c. Goods would cost more because money is worth less
2. Question 2
a. The problem in the economy is t
1. Medium of exchange. It is better than the baiter system, it is efficient in exchange, allows
freedom to buy goods at different prices.
2. M1 is all physical money, demand deposits, checking accounts, and NOW accounts. M2
is everything in M1 plus deposi
A. Define unemployment.
Our text defines unemployment as the number of people who actively looking for
work but arent currently employed
B. What groups are counted in the labor force and thus count toward the
Groups counted in the la
Assignments: 100 points. (Due Monday November 16, 2015 at 11 PM)
1. Why is the Aggregate Demand AD) curve downward sloping? 5 points.
The Aggregate Demand Curve is downward sloping due to the wealth effect of a change
in the aggregate price level and the
Assignment due on Monday October 12th at 11 PM. 100 points
1. What is the CPI? What does it measure? What group is measured by the CPI? Are you
in that group? Why or why not? 10 points
CPI, otherwise known as the consumer price index, measures prices in t
1. A. If the supply of loanable funds increase, what happens to the
equilibrium interest rate? 5 points
If the supply of the loanable funds increases, the interest rate will decrease.
B. If the demand for loanable funds increase, what happens to the